LLQP Segregated Funds & Annuities · Component 1.3 · 35% of the exam
A client asks whether her plan should assume she works part time in early retirement. The analysis should:
- AAssume the income continues for life, since part-time work is easier to sustain than full-time work
- Model it for a limited period and test the plan without it, since health or demand may end it
- CTreat it as pensionable income that will increase her government benefits substantially
- DIgnore it entirely, since income that is not guaranteed cannot be counted in a plan
Correct answer: B) Model it for a limited period and test the plan without it, since health or demand may end it
Working longer is a genuine lever but an unreliable one, so the plan should show both what it contributes and what happens if it stops earlier than hoped.
Why the other options are wrong
- APart-time work rarely continues indefinitely in retirement.
- CModest earnings have a small effect on government benefit calculations.
- DExcluding it altogether understates the client's resources.
Exam tip
Model the working years, then test the plan without them.
Common mistake
Building a retirement plan that depends on working indefinitely.
What this tests
CISRO competency component 1.3 — Assess the client's needs and situation — which is weighted at 35% of the Segregated Funds & Annuities module. Written against the published curriculum.
More from component 1
- The first step before recommending a segregated fund or annuity is to:
- A client's 'time horizon' for an investment is:
- 'Risk tolerance' in an investor profile refers to:
- A client says he wants 'high returns with no risk of losing money'. The agent should:
- Investment objectives are commonly classified as:
- Why is the client's marginal tax rate relevant to a segregated fund recommendation?
Practice the whole Segregated Funds & Annuities module
Timed sets weighted like the exam, and review of every question you miss. Free to start.